When Dr. Copper (CU), the only commodity with a PhD in economics, suddenly collapses from a heart attack, risk takers everywhere have to sit up and take notice.
Since the 2011 top, the red metal has collapsed a shocking 38%. It has given back 10% just in the last two weeks. Will copper take down the rest of the financial markets with it?
I don’t think so.
So called … [Read more...]

No one can explain the most complex economic and monetary issues in a simpler, more homespun fashion than former governor of the Federal Reserve, Bob McTeer.
He is known for carrying around two yardsticks, one slightly longer than the other, to demonstrate to your average guy the monthly changes in employment.
Bob argues that the Fed is getting a bad rap today. Ben … [Read more...]

Ouch. To get snake bit twice in two days hurts. But three times?
I thought that when the General Motors (GM) ignition recall was announced last week, it was a nice entry point on the long side. I was right for at least a whole day.
This morning news hit that there would be a congressional investigation of GM’s handling of the issue. Usually these are no big deal, go … [Read more...]

The industry beating performance of the Mad Hedge Fund Trader’s Trade Alert Service has maintained its gob smacking pace from last year, picking up another 12.6% profit in the first ten trading weeks of 2014.
The Dow Average was up a feeble 1.4% during the same period, pegging my outperformance of the index at a stunning 11.2%. Since the beginning of 2013, I am up 80%, with … [Read more...]

Owners of technology (XLK) and health care stocks (XLV) have certainly had a great year.
Except for the round of profit taking that did a quick hit and run in January, these two groups have been moving from strength to strength, punching through to multiyear highs.
That is, until last week.
Starting with the Ukraine induced plunge a week ago, these two leadership … [Read more...]

If the prospect of WWIII can’t knock this market down, what will it take? A giant asteroid that destroys the earth?
I would have used “Balls to the Wall” in the headline for this piece. But as this is a family oriented newsletter I opted for the more politically correct screamer.
Even the most hardened and seasoned traders, like me and Mad Day Trader Jim Parker, were … [Read more...]

It was another one of those midnight calls from my old KGB friend.
Yuri was assigned to tail me in Tokyo during the 1970’s. He even came to my wedding as the official TASS correspondent. We have stayed in touch ever since. After the fall of the Soviet Union, he landed on his feet (as did his buddy, Vladimir Putin), eventually ending up in the hedge fund industry.
Yuri … [Read more...]

There is a layup of a trade setting up here in the wake of the escalating crisis in the Ukraine. Since January 2, the Treasury bond market (TLT) has enjoyed a massive 8 point rally, taking the ten year yield from 3.05% to 2.60%.
By shorting Treasury bonds here, you are betting that the yield doesn’t drop below 2.48% by March 21, an eight month low. That is only 13 trading … [Read more...]

I believe that we are on the verge of seeing major reversals across all asset classes. Get this one right, and you will make a fortune. Screw it up, and you will soon be looking for your next job on Craig’s List.
I understand that there is a desperate need for code writers in the cloud.
As always, I am taking my cue from the bond market. The great anomaly in the financial … [Read more...]

Let me give you my thinking here. I am a long-term bull, expecting the S&P 500 to be up 10% or more to over 2,000 by yearend, and possibly 20,000 by 2030. But yearend is a long time off (even though every year seems to go by faster). We have just had a massive 11 point pop in the (SPY) during my two week trip to Australia. So a period of digestion is called for.
My (BAC) … [Read more...]

Bank of America (BAC) certainly was the chief whipping boy of the financial crisis. Since 2008, it has paid out more than $50 billion in fines and lawsuit settlements for every transgression under the sun.
After getting a bail out from the US Treasury, it was forced to cut its dividend payment to a token one cent. Do any Google search on the company and you are inundated … [Read more...]

It looks like I hit the nail on the head once again with a major short position in the United States Natural Gas Fund (UNG).
After my followers bought the July, 2014 $26 puts at $2.16 on Monday, the (UNG) suffered its worst trading day since 2007, the underlying commodity plunging a breathtaking 11%. The puts roared as high as $3.05, a gain of 42% in mere hours. I wish they … [Read more...]

I’m half mad with jet lag, and I haven’t pooped in three days. But I’m back from the magical Land Down Under.
It was another one of those incredible, once in a lifetime, bucket list type trips. The highlight was flying my own plane out to a small speck of a coral island 40 miles at sea in the Great Barrier Reef National Park.
There I spotted electric blue starfish, … [Read more...]

The red hot performance of the Mad Hedge Fund Trader’s Trade Alert Service has maintained its blistering pace from last year, picking up another 9.31% profit in the first seven trading weeks of 2014.
The Dow Average was down 2.3% during the same period, pegging my outperformance of the index at a stunning 11.6%. Since the beginning of 2013, I am up 76.8%. 2013 closed with a … [Read more...]

In case you missed it, the second hand animal market has crashed. Forced to slash budgets by cash starved municipalities, the nation’s public zoos have been paring back their collections of living exhibits.
The Washington Zoo is trying to offload a 7,000 pound hippopotamus; while the San Francisco Zoo is short some tigers after one ate a visitor and had to be shot. The … [Read more...]

I have fond memories traveling around northern Mexico during the 1950’s. My grandfather used to drive us across the border into Baja in his pickup truck, the back loaded with camping equipment, water, fishing poles, rifles, and shotguns. There was no border control.
To eat, we only had to wait for the tide to go out on the Sea of Cortez, uncovering a banquet of fresh … [Read more...]

Reformed oil man, repenting sinner, and borne again environmentalist T. Boone Pickens says that “When we turn the US green, it will have the best economy ever.” I met the spry, homespun billionaire at San Francisco’s Mark Hopkins on a leg of his self-financed national campaign to get America to kick its dangerous dependence on foreign oil imports.
For the past 30 years, the … [Read more...]

When I rode Amtrak’s California Zephyr service from Chicago to San Francisco last year, we passed countless trains heading west hauling hoppers full of coal for shipment to China.
This year I took the same trip. The coal trains were gone. Instead I saw 100 car long tanker trains transporting crude oil from North Dakota south to the Gulf Coast. I thought, “There’s got to be a … [Read more...]

Following Howard Ruff for the last 40 years has always been eye opening, if not entertaining. The irascible Mormon is the publisher of Ruff Times, one of the oldest investment letters in the business, and one of the original worshipers of hard assets.
Ruff says that any investment denominated in dollars is a mistake, which is in a long term down trend, along with all paper … [Read more...]

I will be departing for my Mad Hedge Fund Trader’s 2014 Australia and New Zealand tour as soon as I finish writing today’s letter. During the next 18 days, I will fly 22,000 miles, dining with my abundance of readers in the southern hemisphere.
I am leaving you in good hands with a clean conscience. The markets graciously allowed me to exit my three remaining positions with … [Read more...]

I wrote at length yesterday about why this is not a new bear market, but a traditional 7%-10% correction instead. Now, I’ll show you three charts that will call the exact turnaround.
The ten-year Treasury bond (TLT), (TBT) is clearly the lead contract. It has, far and away, been the most accurate in anticipating the future direction of all asset classes. Get this one right, … [Read more...]

I love this market action. For me, it means that we are setting up ideal entry points for a broad range of asset classes that will deliver another +67% year.
It will set up for you too, if you continue to read this letter.
What the market is in fact doing is giving us three corrections for the price of one. Remember the traditional September swoon that never happened, the … [Read more...]

Now We’re Cooking With Gas (UNG)
Those who followed my advice to buy the United States Natural Gas Fund (UNG) July, 2014 $23 puts at $1.68 yesterday are now in the enviable position of owning a security that is running away to the upside.
At this morning’s high the puts traded at $2.40, a one day gain of an eye popping 43%. I am getting emails from a lucky few that they … [Read more...]

Time to Sell Natural Gas
I received a crackly, hard to understand call late last night from one of my old natural gas buddies in the Barnet shale in Texas. Chances are that CH4 peaked in price last night with the expiration of the front month contract. It was time to sell.
I spent five years driving a beat up pick up truck on the tortuous, jarring, washboard roads of this … [Read more...]

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Luncheons, which I will be conducting around the world throughout 2014. Please find the schedule for the next six months below.
To warm you up, I’ll email you a PowerPoint presentation covering the broad range of topics we may cover, which is pretty much everything on the planet. An excellent meal will be … [Read more...]

The day I bought my second lot of shares in the internet giant on December 12 was the exact point where a year of upward momentum in this stock came to a juddering halt.
The shares have since been like an errant teenaged child who you keep giving the benefit of a doubt until he goes out and steals a car. That is show business.
The immediate cause for the selloff was a … [Read more...]

Let me tell you my thinking here.
More than 51 million iPhones sold is good enough for me, 3.2 million more than they moved a year ago, and they are more expensive devices. IPads leapt from 22.9 million to 26 million, including the five high end ones I bought.
The earnings announcement wasn’t that bad, with record quarterly YOY revenues of $57.6 billion reported. Earnings … [Read more...]

For the last couple of nights, I have left my iPhone logged into the Argentina peso market, one of several troubled currencies igniting the emerging market contagion. Whenever the peso losses another handle to the US dollar, an alarm goes off. That gives me a head start on how American markets will behave the next day.
I have not been getting a lot of sleep lately. My poor … [Read more...]

I am building lists of emerging market ETF’s to snap up during the current sell off, and Turkey popped up on the menu.
The country is only one of two Islamic countries that I consider investment grade, (Indonesia is the other one). The 82 million people of Turkey rank 15th in the world population, and 16th with a GDP of $960 billion. Furthermore, 25% of the population is … [Read more...]

After one of the wildest rides in recent memory, the stock market has ground to a complete halt. So have virtually all other asset classes as well.
You can see this in the activity of my Trade Alert service as well. After sending out Alerts as fast as I could write them for the past three months, some three or four a day, the action has slowed to a snails pace. What … [Read more...]

I never tire of listening to economics guru, Robert Reich, speak about the economy. He was former Labor Secretary under Bill Clinton, and ran against Mitt Romney for governor of Massachusetts (he lost). He has published 13 books. Oh, and he dated our recent Secretary of State, Hillary Rodham, when they were in law school together at Yale.
I got to know Bob well when I took … [Read more...]

When I was a young, clueless investment banker at Morgan Stanley 30 years ago, the head of equity sales took me aside to give me some fatherly advice. Never touch the airlines.
The profitability of this industry was totally dependent on fuel costs, interest rates and the state of the economy and management hadn't the slightest idea of what any of these were going to do. If I … [Read more...]

Discretion certainly can be the better part of valor. That was the feeling that came over me last weekend when I saw the Australian dollar (FXA) plunge to a new three year low against the buck.
I had been mulling over buying the Aussie around the $88 support level for the past couple of months. After all, with a synchronized global recovery in progress, and an international … [Read more...]

The red hot performance of the Mad Hedge Fund Trader’s Trade Alert Service has maintained its blistering pace from last year, picking up another 5.73% profit in the first two trading weeks of 2014. The S&P 500 was down during the same period. Since the beginning of 2013, I am up 73.23%.
2013 closed with a total return for followers of 67.45%. Including both open and … [Read more...]

AT&T (T), or Telephone as we used to call it on the floor on the New York Stock Exchange when we hand traded its shares, enjoyed a nice little 50-cent pop yesterday, to $34, only the second day it managed to rise this year.
The move comes after a federal appeals court in Washington DC ruled that the FCC exceeded its authority when it told Verizon Communication (VZ) that … [Read more...]

Apple (AAPL) has delivered again, choosing the expiration week of my January, 2014 $490-$520 bull call spread to take forward their gigantic joint venture with China Mobile (CHL), far and away the world’s largest phone company. Expect to see video of long lines forming at Apple stores throughout china. This is always good for the share price.
This assures that the spread … [Read more...]

Many hedge fund traders are unhappy about the current near monopoly enjoyed by the top three ETF issuers, Black Rock, State Street, and Vanguard, which control 80% of the market.
At last count there were more than 4,800 ETF’s that were capitalized at $2.1 trillion. The result has been grasping management fees, exorbitant expense ratios, and poor structural designs, which … [Read more...]

ETF’s are much more attractive than mutual fund competitors, with their notoriously bloated expenses and spendthrift marketing costs. You can’t miss those glitzy, overproduced, big budget ads on TV for a multitude of mutual fund families. You know, the ones with the senior couple holding hands walking down the beach into the sunset, the raging bulls, etc.? You are the sucker … [Read more...]

The Department of Labor took the punch bowl away from the party on Friday, reporting that the December nonfarm payroll came in at an anemic 74,000. Analyst forecasts had been running in the 200,000-250,000 range.
What was even more interesting was that the labor participation rate dropped to a 1978 low, with nearly 400,000 workers disappearing from the rolls. This is what … [Read more...]

There are only 5 trading days left until the equity option expiration on January 17. My short dated January expiration play turned out to be wildly successful, with all of these positions quickly turning profitable. During the two-week December holidays when markets fell asleep, time decay assured that we made money almost every day, and closed us on the year at an all time … [Read more...]

The performance of the Mad Hedge Fund Trader’s Trade Alert Service finished 2013 with a total return for followers of 67.45%.
Including both open and closed trades, 75 out of the 90 Trade Alerts were profitable, a success rate of 83%. The final month of December alone came in at an eye popping 11.45%.
The three-year return is an eye popping 122.5%, compared to a far more … [Read more...]

My inbox was clogged with responses to my “Golden Age” for the 2020’s piece, particularly my forecast that the US was moving towards complete energy independence. This will be the most important change to the global economy for the next 20 years. So I shall go into more depth.
The energy research house, Raymond James, put out an estimate this morning that domestic American … [Read more...]

Nothing like starting the New Year with going back to basics and reviewing the rules that worked so well for us in 2013. Call this the refresher course for Trading 101.
I usually try to catch three or four trend changes a year, which might generate 50-100 trades, and often come in frenzied bursts.
Since I am one of the greatest tightwads that every walked the planet, I … [Read more...]

I never cease to be amazed by the intelligence provided me by the US Defense Department, which after the CIA, has the world’s most impressive and insightful economic research team. There are few places a global strategist like me can go to get intelligent, thoughtful forty-year views, and this is one. Wall Street, eat your heart out. Of course, they are planning how to commit … [Read more...]

The performance of the Mad Hedge Fund Trader’s Trade Alert Service is still going ballistic, reaching the heady height of 63.08% for the year.
Including both open and closed trades, 24 out of the last 26 consecutive Trade Alerts have been profitable. The results so far in December are up a stunning +7.04.
The three-year return is an eye popping 118%, compared to a far more … [Read more...]

Ben Bernanke finally did the deed. He tapered his quantitative easing program, from $85 to $75 billion a month. I thought he would wait until next month for incoming Fed governor Janet Yellen to take the helm, and the responsibility. It was not to be.
The good news for followers of my Trade Alert Service was that it didn’t matter. $85 or $75 billion is really six of one and … [Read more...]

Rumors hit the market Friday that Sprint (S) will mount a $20 billion takeover bid for T-Mobile (TMUS) in early January. The news caused a late day kerfluffle on what would otherwise have been a slow December pre holiday Friday.
The Shares of both companies immediately jumped 10%, which left many analysts scratching their heads. Normally, the shares of the acquirer falls … [Read more...]

I rely on hundreds of 'moles' around the world whose job it is to watch a single, but important indicator for the world economy. One of them checks for me the want ads in the manufacturing mega city of Shenzhen, China, and what he told me last week was alarming.
Wage demands by Chinese workers have been skyrocketing this year. The biggest increases have been at the low end … [Read more...]

Was there is no limit to how far President Obama was willing to go to stimulate the economy and reassure his election? So I had to be amused when a friend sent me a link to his proposal. Warning: the source is a college humor website, so I would take it with so many grains of salt. For a good laugh, click here at … [Read more...]

I can’t believe how fast the year has gone by. It seems like only yesterday that I was riding the transcontinental railroad from Chicago to San Francisco, writing my 2013 All Asset Class Review. Now 2014 is at our doorstep.
As usual, the market has got it all wrong. There is not going to be a taper by the Federal Reserve next week. If there is, it will be only $5-$10 … [Read more...]

I have always been a big fan of buying a dollar for 30 cents. That appears to be the opportunity now presented by the Japanese software giant, Softbank (SFTBY).
This gorilla of the Internet space was founded and run by my old friend, Masayoshi Son, who many refer to as a combination of the Jeff Bezos and the Bill Gates of Japan. I have known Mas, as his friends call him, for … [Read more...]

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It should not be assumed that the methods, techniques, or indicators presented in these pages will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these pages are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.